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TMI Blog2017 (7) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of market value as contained in the Entry Tax Act and thereafter, certain directions have been issued by the Commissioner, Commercial Tax even to reopen the concluded assessment. It is established that reassessment notice was issued by the State Government on the basis of circular issued by the Commercial Tax Officer as the petitioner did not include the royalty aspect for determination of market value on goods for the purpose of payment of entry tax - it is crystal clear that in the instant case, assessment has been made as per law in force and after the definition of market value is amended with effect from 1-4-2014, and on that basis, circular has been issued by the State Government, the proceeding for reassessment of concluded assessment was initiated and it was concluded making reassessment and taking the amended definition of market value into account, and except the circular of the Commissioner directing opening of reassessment even of concluded assessment on the basis of amendment brought into force from 1-4-2014, there is no fresh/additional material brought on record which can be made basis for reopening the concluded assessment by the assessing officer. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011, 30-8-2012 and 24-8-2013, respectively, and accordingly, entry tax was paid after taking the matter into appeal. It is the case of the petitioner that thereafter, the State vide the Chhattisgarh Entry Tax (Amendment) Act, 2014, has inserted Section 2(fff) in the Act, 1976 by inserting the new definition of "Market Value" with effect from 1-4-2014. Thereafter, the Commissioner, Commercial Tax, issued a memo dated 16-6-2014 stating that the definition of "Market Value" in the Act, 1976 has been explained/clarified by the Amendment Act, 2014 which is made applicable with effect from 1-4-2014 stating that by the cement manufacturers, the amount of royalty is not being included for calculating the entry tax and therefore the cases in which the order for payment of entry tax has been passed, their examination is necessary and thereafter, the cases in which even the assessment order has been passed be reopened in exercise of power conferred under Section 22 (1) of the Act, 2005 and order of reassessment be passed. Thereafter, the Deputy Commissioner, Commercial Tax, on 9-7-2014 finding that he has reason to believe that entry tax in the respective years i.e. 2007-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t include the royalty aspect for determination of market value of goods which may be the cause for occurrence of huge difference in determination of market value. Therefore, the provision for reassessment has been invoked by the competent authority in exercise of the power contained in Section 22 (1) of the Act, 2005. 4. A rejoinder has been filed by the petitioner controverting the averments made in the return. 5. Mr. M.P. Devnath, learned counsel opening the argument on behalf of the writ petitioner, would submit as under: - "5.1) The reassessment proceeding has been initiated on the basis of amended definition incorporated in the Act, 1976 by the Amendment Act, 2014, as the definition of "Market Value" has been redefined/enlarged and that has been made applicable with effect from 1-4-2014 which is apparent from the fact that thereafter only the memo dated 16-6-2014 has been issued by the Commissioner, Commercial Tax directing all the assessing authorities to reopen the already concluded assessment under Section 22 (1) of the Act, 2005 and to take into account the amount of royalty paid to the Government under the Mines and Minerals (Regulation and Development) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another (2015) 6 SCC 773. 2. The assessing authority has rightly reopened and assessed the entry tax in exercise of power conferred under Section 22 (1) of the Act, 2005. In Section 22 (1) of the Act, 2005, "reason to believe" is not required for reopening the concluded assessment, merely on the subjective satisfaction of the assessing authority, proceeding for reassessment can be reopened and, therefore, it has rightly been reopened. 3. The petitioner itself has suppressed the details with respect to payment of royalty to the Government by which the liability of tax is under assessed/has escaped assessment."' 7. Mr. Devnath, learned counsel appearing for the writ petitioner, while replying to the submission made by the learned Government Advocate, in his rejoinder submission would submit that the petitioner Company has submitted all the details about royalty which is apparent from page 72 of the paper book and my attention was drawn to page 72 (paper book) in which it has been mentioned that "Entry tax has been deposited on the value of lime stone excluding the amount of royalty payable on such lime stone. All other variable and invariable expenses hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as under: - "It is well-settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will issue appropriate orders or directions to prevent such consequences The High Court may, therefore, issue a high prerogative writ prohibiting the Income-tax Officer from proceeding with reassessment when it appears that the Income-tax Officer had no jurisdiction to commence proceeding". 11. The principle of law laid down in Calcutta Discount (supra) has been followed with approval by the Supreme Court thereafter in the matter of The Commissioner of Income-tax, Gujarat v. M/s. A. Raman and Co. AIR 1968 SC 49 in which Their Lordships have held that the High Court exercising jurisdiction under Article 226 of the Constitution has power to set aside a notice issued under Section 147 of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entertained a petition despite availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies; unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition." 13. The enunciation of law laid down in Calcutta Discount Co. Ltd. (supra) reiterated in the matter of The Commissioner of Income-tax, Gujarat v. M/s. A. Raman and Co. AIR 1968 SC 49 by Their Lordships of the Supreme Court has further been followed recently in the matter of Jeans Knit Private Ltd. Bangalore v. Deputy Commissioner of Income Tax Bangalore and it has clearly been held that writ petition filed by the assessee challenging the issuance of notice under Section 148 of the Income Tax Act, 1961 and the reasons which were recorded by the Assessing Officer for reopening the assessment is maintainable. 14. In light of the principles of law laid down in Calcutta Discount Co. Ltd. (supra) and Gujarat Ambuja Cement's case (supra) followed in M/s. A. Raman and Co.'s case (supra) and Jeans Knit Private Ltd. (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgment or order of any Court or Tribunal which has become final. 17. This power under Section 22 (1) of the Act, 2005, cannot be exercised as a matter of course. This power can be exercised only in the circumstances which are specified in the Section. It is a prerequisite that before issuing notice the officer must record the reasons for doing so. This is a sufficient safeguard for an assessee against frequent reopening of concluded assessment by the succeeding officers. The power under this section cannot be exercised merely on a 'change of opinion' on the materials already on record. When all the materials on record were considered and after investigation and enquiry a conclusion has been arrived at by an officer in an adjudication of a dispute, such conclusion is in the nature of a judgment. It cannot be reopened by forming a different opinion on the same materials by the same officer or the succeeding officer unless there are fresh materials for doing so. The meaning of the words 'for any reason' contained in Section 22(1) of the Act, 2005 cannot be enlarged so as to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning words used in section 12(8) are "if for any reason" and not "if the sales tax authority has reason to believe", the difference in phraseology, in our opinion, should not make much material difference. A reason cannot exist in vacuum. Somebody must form the belief that reason exists and looking to the context in which the words are used, we are of the view that it should be the sales tax authority issuing the notice who should have reason to believe that the turnover of a dealer has escaped assessment or has been under-assessed. The approach in this matter has to be practical and not pedantic. Any view which would make the opening words of section 12(8) unworkable has to be avoided. It may be noted in this context that in Form VI appended to the rules, which has been prepared in pursuance of Rule 23, the words used are "whereas I have reason to believe that your turnover........ has escaped assessment......... "" 21. Similar proposition has been stuck by this Court in the matter of Shree B.R. Steels v. Additional Commissioner of Commercial Tax, while dealing with the provisions contained in Section 28 (1) of the Chhattisgarh Commercial Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial cannot give rise to necessary precondition of "reason to believe" to reopen concluded assessments and accordingly, reassessment cannot be done on mere change in opinion. The Supreme Court in the matter of State of Uttar Pradesh and others v. M/s. Aryaverth Chawl Udyoug and others has clearly held that discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to re-initiate the concluded assessment and has held in paragraph 31 as under: - "31. In case of there being a change of opinion, there must necessarily be a nexus that requires to be established between the "change of opinion" and the material present before the assessing Authority. Discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to reinitiate proceedings under section 21(1) of the Act on the basis of change in subjective opinion (CIT v. Dinesh Chandra H. Shah, (1972) 3 SCC 231; CIT v. Nawab Mir Barkat Ali Khan Bahadur, (1975) 4 SCC 360)." 24. Their Lordships further held in M/s. Aryaverth Chawl Udyoug's case (supra) that subsequent change in law according to which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded assessment emanating from the judgments of the Supreme Court, now, I would proceed to examine the factual matrix of the case in hand in light of those principles and statutory provisions. 28. In the present case, the concluded assessment has been sought to be reopened on the basis of amendment made in the definition of "market value" as contained in the Entry Tax Act and thereafter, certain directions have been issued by the Commissioner, Commercial Tax even to reopen the concluded assessment. The definition of "market value" as contained in the Act, 1976, suffered amendment by the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar (Sanshodhan) Adhiniyam, 2014 and new definition in shape of Section 2(fff) was introduced explaining/clarifying the earlier definition which has been made affective with effect from 1-4-2014. The definition of "market value" as inserted by the Amendment Act, 2014, reads as under: - "(fff) "Market Value" means the value at which the goods are generally sold in the market or where the goods are not generally sold in the market or the correct sale price thereof is not ascertainable, such value as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmissible in law when the Act does not specify the operation of law as retrospective. Their Lordships further held that discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to re-initiate proceedings. 34. Further, in the matter of M/s. Reliance Jute and Industries Ltd. v. C.I.T., West Bengal, Calcutta, Their Lordships of the Supreme Court have held that it is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. 35. Thus, it is crystal clear that in the instant case, assessment has been made as per law in force and after the definition of "market value" is amended with effect from 1-4-2014, and on that basis, circular has been issued by the State Government, the proceeding for reassessment of concluded assessment was initiated and it was concluded making reassessment and taking the amended definition of "market value" into account, and except the circular of the Commissioner directing opening of reassessment even of concluded assessment on the basis of amendment brought into force from 1-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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